Technology | Media | Telecommunications

Saturday, December 11, 2010

Upside for the Bundling of Mobile Phone Advertising


eMarketer reports that U.S. local mobile phone advertising revenue is likely to increase at a compound annual growth rate (CAGR) of 57 percent from 2009 through 2014, according to the latest market study by BIA/Kelsey.

Local spending on the mobile ad channel is set to rise from $404 million this year to $692 million in 2011 and over $2 billion by 2014, according to their current forecast.

"We expect to see more bundling of mobile advertising by digital and local media companies, in an effort to lower the barriers for adoption by small and medium-sized businesses," said Michael Boland, program director at BIA/Kelsey.

As a result, mobile advertising will move down market to SMB and mid-market segments, increasing the overall revenue opportunity and share of geo-targeted ads.

This down-market shift will be coupled with large advertiser evolution and adoption of mobile local ad distribution.

BIA/Kelsey forecasts mobile ad revenues to increase from $790 million this year to just under $3 billion in 2014. In terms of ad formats, they expect a shift in favor of search engine marketing (SEM) over the same period.

eMarketer's own estimate is a similar $743.1 million in mobile spending this year, rising to a somewhat more conservative $2.55 billion in 2014.

Display ads will remain the dominant format, however, with search approaching but not surpassing it, according to eMarketer's forecast.